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The Section 48/48E commercial ITC is still active for projects beginning construction before July 4, 2026. Stack the 30% base + 10% domestic content + 10% energy community + 10-20% low-income for up to 70%. MACRS 20% bonus depreciation in 2026. Texas commercial rates $0.06-$0.12/kWh. Massive warehouse and industrial roofs.
DEADLINE: July 4, 2026 — Begin Construction
Projects must begin construction before July 4, 2026 to qualify for the commercial ITC. After this date, the credit phases down or expires depending on congressional action. MACRS bonus depreciation drops from 20% to 0% in 2027.
Commercial ITC Active: Section 48/48E provides a 30% base ITC for commercial and third-party solar projects beginning construction before July 4, 2026. The residential 25D credit expired December 31, 2025 ($0 for homeowner cash/loan purchases), but the commercial credit remains available.
Costs vary by system size. Larger systems achieve significantly lower per-watt pricing due to economies of scale. Texas has among the lowest commercial solar costs in the country.
Depreciable basis = system cost - (50% of ITC) = $650,000 - $97,500 = $552,500. Year 1 MACRS at 40% (20% regular + 20% bonus) = $76,050 in tax deductions (value depends on tax bracket). Actual tax savings require consultation with a CPA.
The Section 48/48E ITC starts at 30% and can be increased through qualifying adders. Each adder has specific eligibility requirements. The maximum theoretical stack is approximately 70%.
| ITC Component | Rate | Requirement | |
|---|---|---|---|
| Base ITCRequired | 30% | Meet prevailing wage + apprenticeship requirements (projects >1 MW) | |
| Domestic Content Bonus | +10% | 100% of steel/iron manufactured in US + 40% of manufactured product costs from US sources (2026 threshold) | |
| Energy Community Bonus | +10% | Project located in a brownfield site, retired coal plant area, or statistical area with >0.17% fossil fuel employment AND above-average unemployment | |
| Low-Income Bonus (Category 1) | +10% | Located in a low-income census tract OR on Indian land. Competitive DOE allocation. | |
| Low-Income Bonus (Category 2) | +20% | Part of a qualified low-income residential building project OR low-income economic benefit project | |
| Maximum Total | Up to 70% | Qualifying for all adders simultaneously is rare. Most TX businesses realistically achieve 30-50%. | |
ITC rates and requirements per Inflation Reduction Act as modified by OBBBA (signed July 4, 2025). Projects must begin construction before July 4, 2026. Prevailing wage and apprenticeship requirements apply to projects over 1 MW. Consult a qualified tax professional for specific project eligibility.
Commercial solar qualifies for 5-year MACRS accelerated depreciation. In 2026, an additional 20% first-year bonus depreciation applies. This bonus drops to 0% in 2027, making 2026 the last year with enhanced depreciation benefits.
| Year | Regular MACRS | 2026 Bonus | 2026 Total | 2027 Total |
|---|---|---|---|---|
| Year 1 | 20.00% | 20.00% | 40.00% | 20.00% |
| Year 2 | 32.00% | 0.00% | 32.00% | 32.00% |
| Year 3 | 19.20% | 0.00% | 19.20% | 19.20% |
| Year 4 | 11.52% | 0.00% | 11.52% | 11.52% |
| Year 5 | 11.52% | 0.00% | 11.52% | 11.52% |
| Year 6 | 5.76% | 0.00% | 5.76% | 5.76% |
Projects placed in service in 2026 receive 20% bonus depreciation on top of the regular 20% first-year MACRS rate. This means 40% of the depreciable basis (system cost minus 50% of ITC) can be written off in Year 1. For a $650,000 system with a 30% ITC, Year 1 depreciation deduction is approximately $221,000.
Starting in 2027, the bonus depreciation rate drops to 0%. Only the regular 20% first-year MACRS rate applies. This means $110,500 less in Year 1 depreciation deductions on a $650,000 system. Businesses with significant tax liability should accelerate projects into 2026 to maximize depreciation benefits.
C-PACE (Commercial Property Assessed Clean Energy) is an increasingly popular financing mechanism for commercial solar in Texas. The debt is secured by the property, not the borrower, with repayment through the property tax bill.
C-PACE can cover the entire project cost including soft costs. No upfront capital required from the property owner. Combined with ITC and MACRS, effective out-of-pocket cost can be near zero.
Long repayment terms keep annual payments low. Solar energy savings typically exceed annual C-PACE payments from Day 1, making the investment cash-flow positive immediately.
If the building is sold, the C-PACE obligation transfers to the new owner. This makes C-PACE ideal for property owners who may sell within the loan term. No personal guarantee required.
Additionally, Travis, Harris, Dallas, and Bexar counties have C-PACE programs covering unincorporated areas. Contact NuWatt Energy to verify C-PACE availability for your specific property location and get connected with approved C-PACE providers.
Commercial electricity rates in Texas are among the lowest in the nation. While low rates mean longer solar payback without incentives, the 30% ITC and MACRS dramatically accelerate ROI.
| Metro | Energy Rate | Demand Charge | Note |
|---|---|---|---|
| Dallas-Fort Worth | $0.08-$0.11/kWh | $8-$15/kW | Oncor delivery, deregulated REP pricing |
| Houston | $0.07-$0.10/kWh | $7-$14/kW | CenterPoint delivery, competitive commercial REPs |
| Austin | $0.06-$0.09/kWh | $6-$12/kW | Austin Energy commercial rate schedule |
| San Antonio | $0.07-$0.10/kWh | $7-$13/kW | CPS Energy commercial rates |
| El Paso | $0.08-$0.11/kWh | $8-$14/kW | El Paso Electric commercial schedule |
| Midland-Odessa | $0.07-$0.10/kWh | $7-$12/kW | Oncor delivery, energy community potential |
Commercial electricity bills in Texas typically include both energy charges ($/kWh) and demand charges ($/kW based on peak 15-minute usage). Demand charges can represent 30-50% of a commercial bill. Solar alone reduces energy charges but may not significantly reduce demand charges unless paired with battery storage. For maximum ROI, consider solar + battery to shave peak demand and capture both savings.
Texas has massive commercial solar potential across every industry. Large flat roofs, abundant sun, and low installation costs create ideal conditions for businesses to go solar before the ITC deadline.
Large flat roofs are ideal for solar. TX has massive logistics corridors (I-35, I-10, I-45). Amazon, FedEx, and UPS facilities across TX are going solar. Warehouse roofs generate the highest kWh per dollar due to minimal shading and optimal tilt.
Industrial facilities with high daytime electricity demand see the fastest payback. TX manufacturing boom (semiconductor fabs, petrochemical, food processing) drives commercial solar adoption. Ground-mount systems available for facilities with land.
TX farms and ranches have abundant land and high irrigation electricity costs. Ground-mount solar offsets irrigation pumping, cold storage, and processing facility loads. USDA REAP grants (up to 50% of project cost) available for agricultural solar.
Strip malls, grocery stores, and office buildings benefit from solar during peak business hours. On-site solar reduces demand charges, which can be 30-50% of a commercial electricity bill in TX. Carport solar provides shade parking as an added benefit.
The Foreign Entity of Concern (FEOC) rules impact which solar equipment qualifies for the domestic content bonus. Understanding these requirements is critical for maximizing your ITC.
After July 4, 2026, solar equipment containing components from Foreign Entities of Concern (primarily Chinese-manufactured cells and modules) will face additional restrictions. The domestic content bonus (+10% ITC) requires US-sourced materials.
Several panel manufacturers now produce modules in the US or with US-sourced cells to qualify for the domestic content bonus.
Common questions about commercial solar in Texas in 2026.
National commercial solar guide with ITC details, financing options, and industry-specific ROI.
Read guideComplete overview of going solar in Texas for residential and commercial customers.
Read guide100% property tax exemption under TX Tax Code §11.27 applies to commercial solar too.
Read guideLast updated: February 18, 2026. Commercial solar pricing, ITC adder requirements, and program availability may change. Consult a qualified CPA for tax advice specific to your business. Contact NuWatt Energy for a free commercial solar assessment.
The ITC clock is ticking. Projects must begin construction before July 4, 2026. NuWatt Energy works with licensed commercial solar contractors across Texas to deliver fast timelines, competitive pricing, and expert guidance on maximizing ITC adders and MACRS benefits for your business.